Modeling Relationship between R&D Activities and Organization Knowledge Stock Using System Dynamics Approach

Mohaghar, Ali; Mirkazemi Mood, Mohammad; Rahmany Youshanlouei, Hossein

Modeling Relationship between R&D Activities and Organization Knowledge Stock Using System Dynamics Approach

Authors

Ali Mohaghar

Mohammad Mirkazemi Mood

Hossein Rahmany Youshanlouei

Abstract

Knowledge is identified as a critical factor for innovation. On the other side, knowledge creation takes place through investing on R&D activities and developing new products. Furthermore, not all types of R&D activities result in similar types of innovation. Indeed, investing on research activities result in radical innovation and investing on development activities concludein incremental innovation. Keeping a balance between these two kinds of innovation in products is critical to acquire competitive advantages. To investigate the dynamic-nature and complex relationship between knowledge creation and investing on R&D activities, presenting paper tried to study impacts of different investing policies on knowledge stockusing a systematic view. Hence, “system dynamics” which is an approach to study the complex system is used to model and simulate the presenting system. Beside, a case study was also presented to test applicable capability of the model. The simulation results showed that investing policies on R&D activities must be based on comparing the real performance and the goal performance.

Keywords

Radical innovation

incremental innovation

System dynamics approach

diagram of cause and effect loops

stock and flow diagram